Online auction giant eBay shut down the bidding for a vulnerability in Microsoft's Excel spreadsheet program on Thursday, saying that the sale of flaw research violates the site's policy against encouraging illegal activity.

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Companies have this expectation that this information should be provided to them for free. And that's not fair, because these people are highly skilled labor.
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Greg Hoglund, CEO, HBGary

The vulnerability, which could allow a malicious programmer to create an Excel file that could take control of a Windows computer when opened, appears to be real. Members of the Microsoft Security Response Center (MSRC) are investigating the vulnerability report, a spokesperson for the software giant said Thursday night. eBay pulled the auction after Microsoft complained to the company's Trust and Safety Team, said Catherine England, spokeswoman for the online auctioneer.

"The listing was immediately reviewed and pulled from the site for violating our policy against promoting illegal activity--hacking," England said in an e-mail to SecurityFocus. "In general, research can be sold as a product. However, if the research were to violate the law or intellectual property rights then it would not be allowed."

The online auction company "prohibits the sale of items or links to items that encourage, promote, facilitate or instruct others to engage in illegal activity," according to its stated policy.

The move comes as the idea of selling vulnerability research has gained more traction amongst the security industry and research communities. Buying flaw information is a controversial practice, but one currently supported by at least two security companies: iDefense and 3Com's TippingPoint. Both companies have created initiatives aimed at procuring original vulnerability research from independent flaw finders.

Software makers tend to frown upon such tactics because the exposure of vulnerabilities in their product can significantly undermine trust in their product and even their stock evaluations. Microsoft typically will criticize researchers who publicly disclose flaws before giving the company adequate time, typically at least 30 days and frequently many months, to fix the problem.

The person trying to sell the alleged flaw in Excel, identified only by his eBay nickname "fearwall," laced his description of the flaw with barbs aimed at Microsoft.

"Since I was unable to find any use for this by-product of Microsoft developers, it is now available for you at the low starting price of $0.01--a fair value estimation for any Microsoft product," the seller stated in the description of his auction. Attempts to contact the seller have so far been unsuccessful.

Turning to auctions to maximize a security researcher's profits and fairly value security research is also not a new idea. Two years ago, security expert Greg Hoglund had reserved the domain "zerobay.com" and intended to create an auction site, but worries over liability caused him to scuttle the plan a few days before the site went live, he said.

"I discussed the idea a lot with other people in the community," said Hoglund, who is now the CEO of reverse engineering firm HBGary. "Generally, people thought the idea would be the best way to sell that sort of material."

The problem with the current market for vulnerabilities is that security researchers are generally poorly paid for the amount of work that they have to invest in finding flaws, he said. Knowledgeable researchers, which might otherwise charge $100 or more an hour for their work, can spend weeks searching for security problems, Hoglund said.

"Companies have this expectation that this information should be provided to them for free," he said. "And that's not fair, because these people are highly skilled labor."

Microsoft will continue to analyze the flaw and will provide a patch, if necessary, the software giant's spokesperson said.